Yahoo is moving closer to putting old business behind it as it is reportedly near to closing a multibillion dollar deal to sell back half its stake in China's Alibaba Group.

In a deal expected to be announced September 19, the Chinese Internet giant will pay $7.6 billion to buy back half of the 40 percent stake the Web pioneer holds in Alibaba, according to an All Things D report. The deal will reportedly include a $550 million annual licensing fee that Alibaba paid to Yahoo.

Yahoo declined to comment on the report.

The two Web companies agreed in May to the taxable deal, which includes a complex share buyback plan by Yahoo and an Alibaba IPO. Yahoo will still own 20 percent of the Chinese Internet company after the deal closes. Yahoo is then expected to take its considerable capital gains from that sale and start buying back its own shares, which have long languished in the mid-teens.

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Incentives would also be put in place for an Alibaba IPO at some time in the future, at which time Yahoo would sell its remaining portion of the company. At the time of the IPO, Alibaba will be required to either purchase half of Yahoo's remaining stake or allow Yahoo to sell its shares in the IPO. Yahoo will then have the option to sell its remaining stake at any time after Alibaba's public offering.

The deal's closure is the first step in putting an end to one of more difficult corporate relationships in the Internet community. Yahoo, which has been in a state of uncertainty for months, was said to be considering a deal to sell its Asian assets back to their majority holders in a tax-free deal worth $17 billion. However, an ownership swap involving Alibaba and Yahoo Japan fell apart earlier this year.